How Apple hopes to stop a customer lawsuit over its App Store monopoly

...But Apple is trying to shut the lawsuit down by arguing that consumers shouldn't be allowed to sue at all. The company has seized on a 1977 Supreme Court ruling that held that only a company's direct customers can sue for antitrust violations. In Apple's view, customers buy apps from developers, who turn around and pay Apple a 30 percent cut. That means that only the developers—not ordinary iPhone users—have standing to sue Apple.

But in Monday's oral argument, justices quickly pointed out an obvious problem with that argument. "The first sale is from Apple to the customer," said Justice Sonia Sotomayor. "It's the customer who pays the 30 percent."...

One has to wonder, if Apple makes this claim, there has to be some crazy legal problems that will arise that they have not foreseen. Like you can steal from them but they can't claim that you stole because they don't "sell anything" and they'd have to admit they were stolen from to press charges, making them the reseller. It gets weird.

TL;DR... Apple is disavowing that people buying stuff from them are their customers and have no accountability. Basically, they think anyone who gives them money is an idiot.

No, that is not your opinion only.

I disagree with their argument, but only because it is not comparable to the original concrete lawsuit at all.

In that case, theoriginal sellers of concrete sold to contractor who sold to the state of Illinois.

That is completely different than app developers setting the price of their app to whatever they want and simply paying Apple a 30% fee for the transaction.

That said, Apple is not over charging for apps. Apple is not charging for apps at all. The app developer does.

This lawsuit has no merit because Apple doesn't charge anyone. Apple is merely the transaction facilitator.

As the article also rightly points out. Google charges the same 30%.

Now, the real question is should there be a way to sideload apps. But that is not this lawsuit as noted in the article.

That's your opinion. I don't agree. Apple decides ultimately what I pay and charges me. They may or may not take into account the desires of the app "sellers" there, but Apple charges me, Apple does the transaction, I do no business with the app maker. What price the app maker requests Apple to set is between them, not between the app maker and me. My business is purely with Apple. I contact Apple, Apple sets the price, I agree. There are only two parties involved, me and Apple. The app maker may have a relationship with Apple, but that is not within the scope of the customer relationship. All aspects of the app maker being part of that transaction is purely your opinion. Maybe that is correct, but if it is correct, it is completely opaque to the customer making for a pretty sketchy legal situation where you are now able to have entire transactions without ever contacting or knowing about one of the two parties?

That's like going to McDonald's and being told you were never a customer, you were a customer with the farmer who grew the potatoes. That makes no sense, you can't be his customer, you don't even have a way to know that that person exists.

Then why can't the app maker claim you are a customer of someone else that they make up? For all we know, half those app makers aren't even real. The only known entities are Apple and the buyer.

I would argue that simply by calling it the App Store, Apple has made the claim that I am their customer. Anything called a "store" where you buy a product, you are the customer. In many stores, like Walmart, you might have their vendor setting the price. Nintendo famously did that. That didn't stop me from being a customer of Walmart and it would be absurd to claim anything of the sort. I did no business with Nintendo, I bought something from Walmart.

Apple here operates a store. How they set their prices is their business, not mine. How they change that on the back end, or what a court says, has no bearing on who the actual vendor and customer are. Apple might pay someone off to lie about it in a judgement, but who sold the product and who bought it is crystal clear. The money comes from the customer, to the vendor. If the vendor then pays other people, that's fine, that makes Apple their customer. They likely buy things from other vendors themselves. But that doesn't influence the buyer/seller relationship I have with Apple.

Does Apple give refunds, ever? Do they check with the app vendor before doing so? I believe they do. If so, the app maker does not truly set the price. They only set, at Apple's discretion, part of the price. And since that is at Apple's discretion, it's truly Apple setting the price, at the vendor's request only. I don't agree that the app vendors actually set the price. But I also don't feel that even if they somehow have the truly ability to force Apple to charge whatever they wish, that it has anything to do with the situation.

But unless the app vendors have unlimited control, like being able to set negative amounts or unlimited high amounts and controlling every aspect of every transaction, then it is Apple setting the price ultimately, and the vendor just influencing it.

This is no different than using Paypal to purchase my MangoCon ticket. Paypal is the payment interface.

Totally different. I don't buy things from Paypal. I don't go to a Paypal store. Paypal is not the provider of the product. Paypal does not control the price.

It's different in every way I can imagine except the trivial side portion of maybe Apple handles the financial bit, too. But that's not the part being discussed. It's the store portion that Paypal doesn't offer.

If I make a purchase online, I go to a store and buy the product. If I pay with Paypal, that's a separate thing from the provisioning and delivery of the product. Let's say Steam (do they use Paypal?)

I go to Steam. They have a store. I select my products. I put them in my shopping cart. I pay with Paypal. Steam delivers the products. The vendor here is Steam, not the app maker. And the Paypal piece isn't even part of the discussion.

Now Apple...

I go to Apple. They have a store. I select my products. I put them in my shopping cart. I pay with Apple Pay. Apple delivers the products. The vendor here is Apple, not the app maker. And the Apple Pay piece just happens to also be the same as the vendor, but not relevant. Apple is in every position from the store to the delivery to even the payment. Apple appears to be the vendor more than in any normal transaction because they cover every single aspect of the transaction, not just most of them.

It is not different. You are intentionally ignoring easily searched facts on how the app stores (Google and Apple) work.

What facts are those? You can't claim that Apple has no control over the pricing. I'm also pointing out very clearly that those pieces you are talking about are smoke and mirrors and not relevant to the issue. How the price is set has no bearing on what I'm discussing.

That article also points out that Apple hands the taxes before it goes to the app maker. That, at least in the US, makes Apple by law the vendor, not the app maker. Only the vendor with a customer sale is allowed to collect taxes.

Also very important.. Apple chooses what is sold. It's not like eBay or Etsy where anyone can sell anything. Or there are simple guidelines of what you can sell (no drugs, no body parts) that you self police and can get reported for. No, it's a store where the app makers submit a proposed app and Apple decides if the store will carry it, it is a curated store. That aspect alone, I think determines that Apple is the vendor in question.

I feel that Apple bringing up the pricing is all misdirection. They are trying to get people to look at and discuss something unrelated in the hopes that they miss the core fact that Apple is running a traditional store and playing the vendor in every aspect, including all interfacing with the customer. To the customer, Apple is the sole vendor in play (and in reality, it is.)

On top of that, the license for the software in the store comes from Apple. So not only is Apple operating as the store (that alone makes it the vendor in question), but they are also playing the next tier up by representing the licensing of the product. So the EULA that you get, the one in which you are the customer, has Apple as the one providing the license.

It is not different. You are intentionally ignoring easily searched facts on how the app stores (Google and Apple) work.

This also ignores that Google has dozens of different "Play Store" competitors that can and do set different prices, sales, and have exclusive apps. That's completely different then the case with Apple's "App Store".

It is not different. You are intentionally ignoring easily searched facts on how the app stores (Google and Apple) work.

This also ignores that Google has dozens of different "Play Store" competitors that can and do set different prices, sales, and have exclusive apps. That's completely different then the case with Apple's "App Store".

This is no different than using Paypal to purchase my MangoCon ticket. Paypal is the payment interface.

It's totally different - because in your example, you're buying from MangoCon - the interface for the main purchase is MangoCon's, not Paypal's.. Also, the receipt says you purchased from MangoCon - not purchased from Paypal.

With apple - it's much more like the walmart example - you go to a store - Walmart (or Apple's App Store) and buy a product. Again the receipt says you paid Walmart/Apple - not the app developer.

Also very important.. Apple chooses what is sold. It's not like eBay or Etsy where anyone can sell anything. Or there are simple guidelines of what you can sell (no drugs, no body parts) that you self police and can get reported for. No, it's a store where the app makers submit a proposed app and Apple decides if the store will carry it, it is a curated store. That aspect alone, I think determines that Apple is the vendor in question.

Actually I'll disagree with you here - Let's use a swap meet instead, the host for the swap meet could set any rules they want for what's sold at the swap, that doesn't make the transaction between the buyer and the swap meet host, it could still easily be between the vendor and buyer.

The Supreme Court on Monday wrestled with whether to allow a 40-year-old legal doctrine to derail a class-action lawsuit arguing that Apple uses its monopoly control over the iPhone app market to overcharge customers for apps.

This implies that it's only about "gouging" and the use of monopoly to prevent another store from coming in to compete.

While I agree with JB that the presented president does not apply - I do think based solely on the quoted bit that Apple does have a monopoly and is possibly gouging. Of course the argument that Google charges the same amount really makes the gouging part hard to swallow.

Also very important.. Apple chooses what is sold. It's not like eBay or Etsy where anyone can sell anything. Or there are simple guidelines of what you can sell (no drugs, no body parts) that you self police and can get reported for. No, it's a store where the app makers submit a proposed app and Apple decides if the store will carry it, it is a curated store. That aspect alone, I think determines that Apple is the vendor in question.

Actually I'll disagree with you here - Let's use a swap meet instead, the host for the swap meet could set any rules they want for what's sold at the swap, that doesn't make the transaction between the buyer and the swap meet host, it could still easily be between the vendor and buyer.

Sure, but that's exactly the opposite of the case here. So this shows agreement with my point. Because Apple is doing nothing like this. The organizing of the swap meet does not control pricing, nor handle the transactions, not accept the payment, nor run a store.

So you see, if they DID do something like this - opposite to reality - then yes, things would be different. So since they are the opposite of this, then that's my point exactly.

The Supreme Court on Monday wrestled with whether to allow a 40-year-old legal doctrine to derail a class-action lawsuit arguing that Apple uses its monopoly control over the iPhone app market to overcharge customers for apps.

This implies that it's only about "gouging" and the use of monopoly to prevent another store from coming in to compete.

While I agree with JB that the presented president does not apply - I do think based solely on the quoted bit that Apple does have a monopoly and is possibly gouging. Of course the argument that Google charges the same amount really makes the gouging part hard to swallow.

Also very important.. Apple chooses what is sold. It's not like eBay or Etsy where anyone can sell anything. Or there are simple guidelines of what you can sell (no drugs, no body parts) that you self police and can get reported for. No, it's a store where the app makers submit a proposed app and Apple decides if the store will carry it, it is a curated store. That aspect alone, I think determines that Apple is the vendor in question.

Actually I'll disagree with you here - Let's use a swap meet instead, the host for the swap meet could set any rules they want for what's sold at the swap, that doesn't make the transaction between the buyer and the swap meet host, it could still easily be between the vendor and buyer.

Sure, but that's exactly the opposite of the case here. So this shows agreement with my point. Because Apple is doing nothing like this. The organizing of the swap meet does not control pricing, nor handle the transactions, not accept the payment, nor run a store.

So you see, if they DID do something like this - opposite to reality - then yes, things would be different. So since they are the opposite of this, then that's my point exactly.

My whole point was that Apple can and DOES choose what is sold.. perhaps they don't do the rest, but they definitely do that - they control what is and what is not sold.

The Supreme Court on Monday wrestled with whether to allow a 40-year-old legal doctrine to derail a class-action lawsuit arguing that Apple uses its monopoly control over the iPhone app market to overcharge customers for apps.

This implies that it's only about "gouging" and the use of monopoly to prevent another store from coming in to compete.

While I agree with JB that the presented president does not apply - I do think based solely on the quoted bit that Apple does have a monopoly and is possibly gouging. Of course the argument that Google charges the same amount really makes the gouging part hard to swallow.

Not really, one act of gouging does not stop another.

Perhaps not - but unless you're going to say that Google and Apple are colluding to make the price that high for the service - at least there's competition, and these two companies have found that the market is accepting of this price.

So apple is not operating like a swap meet, that has been established. It is operating like a consignment store? In those cases, when a store sells something on consignment, doesn't the buyer ultimately buy from the store, and not the consignee? I am asking because I have never been to a store like that.

So apple is not operating like a swap meet, that has been established. It is operating like a consignment store? In those cases, when a store sells something on consignment, doesn't the buyer ultimately buy from the store, and not the consignee? I am asking because I have never been to a store like that.

It's definitely closer. I have shopped in consignment stores before - but a question I would have is - what about returns? I'm guessing most shops simply have a zero return policy to make it a non issue though.

Also very important.. Apple chooses what is sold. It's not like eBay or Etsy where anyone can sell anything. Or there are simple guidelines of what you can sell (no drugs, no body parts) that you self police and can get reported for. No, it's a store where the app makers submit a proposed app and Apple decides if the store will carry it, it is a curated store. That aspect alone, I think determines that Apple is the vendor in question.

Actually I'll disagree with you here - Let's use a swap meet instead, the host for the swap meet could set any rules they want for what's sold at the swap, that doesn't make the transaction between the buyer and the swap meet host, it could still easily be between the vendor and buyer.

Sure, but that's exactly the opposite of the case here. So this shows agreement with my point. Because Apple is doing nothing like this. The organizing of the swap meet does not control pricing, nor handle the transactions, not accept the payment, nor run a store.

So you see, if they DID do something like this - opposite to reality - then yes, things would be different. So since they are the opposite of this, then that's my point exactly.

My whole point was that Apple can and DOES choose what is sold.. perhaps they don't do the rest, but they definitely do that - they control what is and what is not sold.